Pound US Dollar (GBP/USD) Exchange Rate Steadies as US Economic Data Disappoints

June 6, 2019 - Written by John Cameron

STORY LINK Pound US Dollar (GBP/USD) Exchange Rate Steadies as US Economic Data Disappoints

GBP/USD Exchange Rate Flat as US Nonfarm Productivity Eases

The Pound US Dollar (GBP/USD) exchange rate steadied today and is currently trading around $1.2699 on the interbank market.

The US Dollar (USD) failed to gain against the Pound (GBP) following poor US economic data, with the nonfarm productivity figures for the first quarter easing below the consensus at 3.4%.

These were followed by the US continuing jobless claims which increased above the forecast 1.660m to 1682m.

Meanwhile, the US-China trade tensions are once again flaring up, with President Donald Trump threatening to increase tariffs on China, saying that he could increase them by another $300 billion.

Mr Trump said:

‘Our talks with China, a lot of interesting things are happening. We’ll see what happens ... I could go up another at least $300 billion and I’ll do that at the right time. But I think China wants to make a deal and I think Mexico wants to make a deal badly.’

The Pound (GBP), meanwhile, has remained steady as uncertainty mounts surrounding both Brexit and the future of the new Conservative leader, thus leaving many Sterling traders to remain cautious.

GBP/USD Exchange Rate Flat as BoE Carney Fails to Address Monetary Policy

Sterling, however, remained steady following the speech by Mark Carney, the Governor of the Bank of England, today, as he failed to make any comments on monetary policy – leaving many Pound investors relieved, as expectations were that he would be generally dovish in tone.

Michael Gove, the Environment Secretary, meanwhile weighed in on Brexit, saying that the 31 October leaving date for the UK from the EU was arbitrary, adding that it all depends on whether Parliament can secure a deal.

Mr Gove said:

‘The critical thing to do is to recognise if we're not 100% out by midnight on 31 October - then we risk making that arbitrary deadline the determinant of what a good deal is.’

‘If we're so close to the wire with what I believe is a better deal, it would be right to take those extra few days or weeks in order to land it and to make sure that we're out.’

With the lack of UK economic data today, the Pound has remained relatively steady against most of its competitors.

GBP/USD Outlook: Sterling Could Improve on a Brexit Breakthroug

‘Greenback’ traders will be looking ahead to the US nonfarm payrolls figures for May tomorrow, and with any signs of improvement, this could prove USD-positive.

Tomorrow will also see the printing of the US average hourly earnings figures for May, which, however, are expected to remain unmoved at 3.2%.

Sterling traders will be focusing on the UK Halifax house prices figures for May, although these may not be enough to provide any great movement for the GBP/USD exchange rate.

The Pound US Dollar (GBP/USD) exchange rate is more likely to be driven by political developments, with Brexit and the Tory leadership remaining in focus – any breakthrough in either could uplift market sentiment in Sterling, as the political deadlock would be effectively challenged.

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